The Financial Supervisory Service (FSS) of South Korea has initiated a field inspection at Toss Bank due to a significant error in the application of yen exchange rates, which resulted in a loss that is estimated to be around 10 billion won. This error occurred on the evening of November 11th, where for a brief period of about seven minutes, the exchange rate for Japanese yen dropped drastically from the normal rate of approximately 934 won to just 472 won, leading to significant transactions amounting to around 20 billion won executed at the incorrect rate. The FSS's inspection aims to ascertain the cause of the error, the scale of transactions that occurred, and whether repercussions are necessary for the investors affected.

Preliminary findings suggest that the error was caused by a computer glitch during internal system checks at Toss Bank. Although the bank acted swiftly to normalize the exchange rate within minutes, the rapid transactions that occurred during the error period imply that many customers had automated exchange orders set up. The affected orders were likely pre-configured at lower exchange rates, leading to extensive losses based on the erroneous pricing. Some customers also took advantage of the sudden drop in the exchange rate to initiate transactions manually during this interval.

The FSS and Toss Bank are currently examining the implications of the error, including the potential cancellation of transactions and the response strategies for affected clients. Under the Electronic Financial Transactions Act, transactions deemed erroneous can be canceled, and incorrect payments returned to clients. Past incidents in the financial sector, such as a similar error at Hana Bank last year, have set precedents for managing such errors, raising questions about the responsibilities and liabilities of financial institutions in cases of system failures.